Property For Industry buys Wellington site for $15.3m

Property For Industry [NZX: PFI], which increased its portfolio by two-thirds last year through a merger with Direct Property Fund, will spend $15.3 million on a Wellington property after selling $12.2 million worth of non-core properties in the first-half.

The Auckland-based property investor has entered into an unconditional agreement to buy the 14,995 square metre Hutt Park Road site which is currently being developed by Kea Property Group, the company said in a statement. Property For Industry has leased the Wellington site to EBOS subsidiary Masterpet Corp for 10 years at $1.16 million, or a 7.6 percent yield, for the investor, with rent reviews every three years. Settlement is expected mid-next month.

The company recently sold two Omega Street locations in Auckland for $2 million, bringing the total number of non-core assets sold to five with gross proceeds from the sales worth $12.2 million. Property For Industry has 80 industrial properties across the North Island and in Christchurch.

"The acquisition of 143 Hutt Park Road in Wellington combined with PFI's recent sales are examples of PFI's strategy of recycling capital from the sale of non-core property into core industrial opportunities," general manager Simon Woodhams said.

Shares in the listed industrial property landlord were unchanged at $1.335 and have gained 3.5 percent this year, underperforming the NZX 50 Index's 9.2 percent increase. It is the fifth-largest listed property company by market value and has an average recommendation of 'hold' according to five analysts surveyed by Reuters, with a median price target of $1.32.